Indian Rupee to stick at 60/$ in the coming decade

The currency of India is standing firm at the exchange rate of 60 Rupees per 1 dollar as per the records of recent months. Last year, with the falling economy and unstable reforms of the government brought the value of Rupee closing at 69 rupees in exchange of a dollar in August last year. 

The new Modi-led government changed the scenario of markets in the past few months boosting the market indices, i.e. NSE Nifty and S&P BSE Sensex and appreciating the value of INR to 60 rupees per dollar. Indian economy fell magnanimously during the last year, therefore the recovery reforms are acting up quickly promoting hastened growth. The good news about positive balance of payment overview, business friendly structural reforms and rapid growth are raising hopes of investors.

Forex investors are looking forward to growth in the value of rupee. Other investors inspired from the growing trend in the markets, outperforming companies in the first quarter are hoping to secure higher profits with increased value of INR.

"Investments in the India determined to climb will most probably jump up to $1.9 trillion from $600 billion in the coming decade," an American multinational financial services provider said. 

In reports of the coming decade, gross domestic product (GDP) is rising with an average growth of 2.5 percentile in the year 2024, starting at 1.5 percent as reported now. Current Account Deficit predictions are painting trend at 2.5 percent of GDP over the coming next 10 years.

Financial analysts at the American service provider said, "Foreign direct investment (FDI) is the major player pushing up the one of the worlds fastest growing economy's currency." These are the supporting factors of the economy which are appreciating the value of Rupee.

The other side of the coin holds strong with the central bank of India pressurizing the currency to stick low. According to the world-renowned research and financial corp. of America, Reserve Bank of India (RBI) will continue purchasing dollars over the coming years safeguarding rupee from external volatility, such as unexpected hike in oil prices or splurging interest rates in the US. After INR rises stably, India will receive the benefit of having a sponge back to support its prevailing rates in the events of external shocks. 

"The country's import cover depreciated much after the global financial crisis, and RBI needs to build up $100-150 billion of reserves to bring back the import support crossing 12 times... Similarly, India's external coverage ratio at 2.26 times is far behind the average set at 4 times for EM economies, forcing the country to work on increasing its forex reserves," an economist explained.

Growing inflation is one of the biggest challenges for rupee as it has a direct effect on the purchasing power of the country. Countries with steeply growing inflation, like India are depreciating their currency exchange rates to fight the growing prices but it does not solve the root problem.

"Assuming that US CPI inflation levels to its target of 2 per cent and India follows a dis-inflationary passage in the coming years, the inflation differential compared to US is going to stand 30-35 per cent decline in the purchasing power parity fair value for the Indian currency, our computation over the minimal value estimated over a decade points out a 75-85 range," an investment bank said.

 

Small caps of BSE shed 2.17%

The benchmark indices of India, Nifty and Sensex hit an all time lowest intra-day level in the noon trade on Friday. The steep fall in the European stocks caused the indices to slip down settling at the lowest point.

S&P BSE Sensex, narrowed 212.50 points, i.e. falling 0.81 percent, 240.82 points away from the intra-day jump and added 4.49 points up from the lowest record of the day.

The market pulse was beating low, as two losers showed up at the rate of one gainer in the BSE record. BSE Mid-Cap index and small cap slumped at 1.68 percent and 2.17 percent respectively.

Wipro shares slugged 4.8 percent after the company published Q1 revenue lower than predictions. Trades in realty drowned the statistics. Tata Sponge Iron prized at its record high rates. Shriram Transport Finance Company drowned after the company disappointed investors with weak quarterly profits. LIC Housing Finance sank with its lowered first quarter results.

At 1300 IST, S&P BSE Sensex traded at 26,059.35, lowered by 212.50 points or 0.81 percent. The index shed 216.99 points hitting the lowest point breaking last bumper record of July 23 at 26,054.86. Sensex recorded intra-day high climbing 28.32 points at 26,300.17 in morning trade. On BSE, in approximate figures 1,909 shares bellowed and 754 shares grew.

CNX Nifty dropped by 0.84 percent equals to 65.4 points to 7,765.20. Nifty hit the lowest point last set on July 23 at 7,763.10 on Friday. Index recorded the intra-day high at 7,840.95 an all time high record setter.

BSE Mid-Cap index fell 156.29 points or 1.68 percent resulting at 9,137.17. BSE Small-Cap index drowned 222.23 points or 2.17 percent ending at 10,007.10. Both these indices performed lower than expectations weakening market sentiments in the Sensex. BSE turnover computed at 1300 hours IST stood at Rs 2186 crore.

30-share Sensex pack with major companies analytics said, "21 stocks frowned lower while the others pushed up a little."

Hindalco Industries slipped 3.19 percent, Tata Motors slugged 2.54 percent and Sesa Sterlite slumped 2.97 percent major losers in the Sensex pack.

 

Bharat Heavy Electricals Limited (Bhel), country's largest power equipment manufacturer, fell 5.44 percent to Rs 223.50, with the stock promoting intra-day low bells. The stock performance recorded volatility. Scrip showed the trading at Rs 237.70 high and lowest at Rs 223.05 on the closing day of the week.

Gold continues to fall

Gold season seemed off as the lowering physical consumption of the commodity dragged the prices down to the lowest level recorded in a week. On the other hand, equity trading hiked as more and more investors followed the positive market sentiment.

Immediate delivery Gold shed 0.6 percent costing $1,296.36 an ounce. The trading price set lowest fortnight record, breaking last record of  $1,297.86 set on 16 July 2014 in Singapore.

The yellow metal is after the the weekly drop trend after three days of withdrawal from the market. Analysts predicted, "Gold is planning to fall back in the cycle after the turn around in May."

Predictions of Federal Reserve's decreasing the trigger points in the precious metal trader pulled MCX Bullion down by 28 percent in the previous fiscal year.

Facebook Inc. outperformed in the market yesterday crossing analytical estimates. The S&P 500 index climbed setting a new record on Wednesday. 

The combined data presented higher consumption in China over the previous largest gold consumer India. According to latest records, consumption in China dropped 19 percent in the first quarter of FY 2014-15. Second largest German Bank quoted, "Indian demand is set up at no rising point as restrictions continue to block imports and hence Gold cannot expect any gains in pricing from the country."

“Increasing investments in the U.S. equities continues to challenge gold, amid safe-haven's support with increased buying,” a commodity researcher working in renowned Australian bank said.

Goldman Sachs Group Inc. restated a call option at the yellow metal gold slipping to $1,050 by the end of 2014 amid the U.S. economy's fast recovery, analysts said. The bank hiked the long-term citation by 13 percent to supporting a cost level of $1,200 in 2014-dollar terms (the marginal cost).

Gold revived 8 percent recently in various parts of Ukraine and the Middle East with easing tensions of geopolitical tensions. The price did not to climbed as expected after a pro-Russian separatists shot down two Ukrainian fighter jets in the same eastern region, where earlier Malaysian Air passenger jet shot on July 17, the government said.

Gold with delivery in December slugged 0.6 percent to $1,298.40 an ounce in New York, reporting the lowest level since July 16, prior trading at $1,300.10. t The largest bullion-backed exchange-traded product, SPDR Gold Trust holdings climbed again today following the rise yesterday, data on its website showed.

Immediate delivery Silver downgraded 0.5 percent to $20.8065 an ounce. Spot platinum fell 0.3 percent to $1,477.25 an ounce, and palladium dropped 0.2 percent to $869.75 an ounce.

 

Sensex jumped to set a new record

BSE benchmark indicated reviving markets as it set a new closing peak of 26,147.33 backed by widespread buying of funds.

Retail investors encouraged with growth in Q1 profits made the market breath optimistic. Blue-chip companies covered up pending short positions are trading high in the market by speculative investors.

Further, a firm trend in global markets on producing unexpectedly high earnings from companies and easing concerns over Ukraine influenced the trading emotions here, brokers quoted.

30-share BSE index Sensex climbed 121.53 points to closing at 26,147.33 and the 50-share NSE index surged 27.9 points to ending at 7,795.75.

In BSE sectoral indices, IT and TECH indices leaded the hike growing 2.24 percent and 1.74 percent, respectively. The next top growing indices listed consumer durable with 0.37 per cent and auto with 0.19 per cent.

The laggards included metal, healthcare, realty and power indices steeply slipping at 0.39 percent, 0.17 percent, 0.14 percent and 0.05 percent, respectively.

Top gainers are Infosys, Hindalco, TCS, Wipro and M&M, and the shares of Tata Steel, Tata Power, Maruti, ONGC and Axis Bank dragged the market.

The benchmark BSE Sensex jumped 0.62 percent, i.e. 162.84 points amounting to 26,188.64, in early trade close to it's all time high of 26,190.44 set on July 8. Benchmark index, Sensex rebounded 1,019 points in the last six sessions.

The National Stock Exchange index Nifty hit an all time high setting a new record at 7,809.20 points, pushed up with surging stocks of  IT, banking, tech, oil & gas, auto, and pharma. Major reason boosting their stocks values is hiking foreign capital influx along with boosting corporate earnings.

50-issue index revived at the 7,800-level for the second time after 8 July this month. Nifty expanded by 0.53 percent, equivalent to 41.35 points to creating the new benchmark at 7,809.20. The previous intra-day high breaking records of set at 7,808.85 points.

Besides the rising optimism in investors' sentiment, with arrival of monsoon, positive economic data and global cues inflicted the growth pattern.

Top gainers on NSE listed Infosys, Bank of Baroda, Reliance, GAIL, Sun Pharma and Jindal Steel.

Foreign portfolio investors (FPIs) purchased shares with a net-worth of Rs 412.03 crore on Tuesday, according provisional data from the stock exchanges.

European stocks expanded following Tuesday's gains as investors weighed earnings results from companies. Daimler AG and ABB (ABBN) Ltd. leaded the list where US stock-index futures changed a little and Asian shares jumped.

Asian shares hiked supported by decline in recent geopolitical tensions. Violence stood firm in Gaza, but positive outlook are easing tensions in Ukraine after pro-Russian rebels sent the flight recorders and victims' remains from a downed Malaysian airliner to international authorities.

 

Gold & Silver futures down

MCX GOLDPETAL July contract traded Rs 7 lower, falling by 0.24 percent at Rs 2863. The GOLDPETAL rate hit Rs 2870 highest on Tuesday and recorded lowest price at Rs 2861 in intra-day. 2323 contracts recorded finalized trades in the series of July contracts. Prices of the commodity slipped Rs 115, or 3.86 percent in the July series so far.

August contracts of MCX GOLDPETAL traded at Rs 2839 losing Rs 5, or about 0.18 percent. The GOLDPETAL rate crossed the intra-day top limit at Rs 2843 and reported lowest at Rs 2833. 960 contracts made the deals in August contracts as of Tuesday. GOLDPETAL prices shredded Rs 261, or 8.42 percent in the August series so far.

MCX GOLDPETAL September contract dropped by Rs 5, or 0.18 percent exchanging at Rs 2838. The GOLDPETAL rate measured the highest gains at Rs 2839 and downfall capped at Rs 2833. 118 contracts reported exchanges in the market today. GOLDPETAL prices appreciated Rs 163, or 6.09 percent in the September series so far.

The restrictions on Gold trading decided to continue according to the statements of Financial Minister Arun Jaitely.

"The measures taken by the government and the RBI restrained India's current account deficit to USD 32.4 billion in 2013-14 and improved foreign exchange reserves to USD 316.4 billion on July 4, 2014," Jaitley said in reply to questions in Rajya Sabha. He gave heads up to the restrictions on gold import quoting, "apparently seems to have worked" and added the government is trying to contain CAD at "containable level".

MCX SILVERM August contract dropped Rs 194, or 0.43 percent trading at Rs 45000. The SILVERM rate capped intra-day high at Rs 45140 and dropped to Rs 44856 lowest on Tuesday. 8292 contracts finalized on the exchange. SILVERM prices fell Rs 2106, or 4.47 percent in the August series.

MCX SILVERM November contract recorded trades at Rs 45839 lowered by Rs 256, or 0.56 percent. The SILVERM rate planted an intraday high of Rs 46200 and low of Rs 45649. 325 contracts executed on Tuesday. SILVERM prices slipped Rs 4357, or 8.68 percent in the November series.